Treasury Inflation-Protected Securities

• How does the Treasury determine the I Bond fixed rate? It’s a mystery.
• A recent surge in 5-year real yields seems to justify an increase in the fixed rate, and 10-year real yields are also rising.
• Most I Bond investors are waiting until November 1 to complete their I Bond allocation for 2017. What are the odds of a higher fixed rate?

Read my full analysis on SeekingAlpha.com

• I Bond investors have entered 2017’s limbo period: Buy now, or wait until November?
• If you view I Bonds as a short-term investment, buying now seems to be the wisest decision.
• Investors longing for a higher fixed rate than zero will want to wait until November 1 to see the Treasury’s fixed-rate reset.

Read my full analysis on SeekingAlpha.com

• Buy-and-trade investors ought to be at least a little frightened; 30-year TIPS are very volatile investments.
• The real yield for this TIPS is currently trading very close to the 0.875% coupon rate. It should auction at close to par value, plus accrued inflation.
• The inflation breakeven rate is about 1.93%, which I consider ‘fair value’ versus a 30-year nominal Treasury.

Read my full analysis on SeekingAlpha.com

• Hurricane-boosted gasoline prices have caused a two-month surge in overall inflation.
• The Social Security cost-of-living adjustment will be 2.0% for 2018, lower than the Social Security Administration’s projection but higher than looked likely three months ago.
• The I Bond will get a new variable rate of 2.48% on November 1, an attractive number that was also boosted by the two-month surge in inflation.

Read my full analysis on SeekingAlpha.com